New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
Geothermal sector to adopt oil and gas investment framework
1/4/2026
News
The US geothermal sector has developed across two fronts, as Fervo Energy has secured financing for its flagship US Cape Station project, while Project InnerSpace has partnered with the Society of Petroleum Engineers (SPE) to establish a global framework modelled around oil and gas.
Houston-based Fervo Energy has closed $421mn in non-recourse project financing for its Cape Station geothermal development in Utah, US, marking one of the largest financing to date for enhanced geothermal systems (EGS), which use techniques similar to hydraulic fracturing (fracking) to open up paths for water to flow through rock.
The deal transitions the project from early-stage and bridge funding to a long-term capital structure, highlighting, it said, growing lender confidence in EGS as a utility-scale energy source.
Located in Beaver County, Cape Station is expected to begin delivering power in 2026, reaching around 100 MW by early 2027, with plans to scale to 500 MW. The project is fully contracted under power purchase agreements (PPAs) with Southern California Edison, Shell Energy and community choice aggregators.
The financing package includes a $309mn construction-to-term loan, a $6mn tax credit bridge loan and a $51mn letter of credit facility. Proceeds will fund remaining construction costs for the project’s first phase and support credit obligations linked to its PPAs.
Project InnerSpace and SPE launch initiative to unlock geothermal investment
Geothermal nonprofit company Project InnerSpace has announced a partnership with the Society of Petroleum Engineers (SPE) to develop a global standard aimed at accelerating investment in geothermal energy.
The Geothermal Resource Management System (GRMS) will be modelled on the oil and gas industry’s widely used Petroleum Resources Management System (PRMS), enabling geothermal projects to be evaluated using an established financial and technical framework.
‘The financial community already understands how to speak the language of large-scale subsurface energy development through oil and gas. We hope that geothermal resources will soon be included in that same framework,’ said Simon Seaton, Chief Executive Officer, SPE. He added that GRMS is a ‘foundational step’ towards building the market structures needed to scale geothermal development globally.
The initiative follows a two-year analysis by Project InnerSpace involving experts across finance, energy, insurance and policy. It identified the lack of a standardised system for valuing geothermal resources as the primary barrier to large-scale investment.
By aligning geothermal with PRMS, Project InnerSpace says the framework could significantly reduce costs and delays across the sector. Standardised contracts enabled by GRMS are expected to cut legal and transaction costs by 40–60% and shorten deal timelines by up to five months. That could translate into more than $100mn in annual legal savings for the geothermal industry within four years.
An initial version of the GRMS framework is expected to be delivered within one year.
